press release

Chevron and Partners Commit to Development of the Frade Field Offshore Brazil

SAN RAMON, Calif., June 21, 2006 -- Chevron Corporation (NYSE: CVX), through its affiliate Chevron Frade Limited Liability Company, along with partners Petrobras and Frade Japao Petroleo Limitada (FJPL), a joint vehicle company of INPEX, Sojitz and JOGMEC, today announced their commitment to develop the Frade oil field offshore Brazil.

The Frade Field is Chevron's first oil field development project in Brazil. It is expected to begin production in late 2008 or early 2009, with production capacity of approximately 100,000 barrels of crude oil per day and estimated peak annual production of 85,000 oil-equivalent barrels per day. The Frade Field contains an estimated 200 million to 300 million barrels of recoverable oil and is located in the Campos Basin in a water depth of 3,500 feet, approximately 75 miles offshore the state of Rio de Janeiro.

"This commitment marks the first major upstream development for Chevron in Brazil and is aligned not only with Chevron's upstream growth strategies for the region but will bring significant new crude oil supplies to the world market," said John Watson, president, Chevron International Exploration and Production.

Chevron, as operator, together with partners Petrobras and FJPL recently signed contracts for construction and installation of the major facilities components for development of the Frade Field. The entire project represents an estimated financial commitment of approximately US$2.4 billion.

Ali Moshiri, president, Chevron Latin American Upstream, said, "The Frade Project will establish the foundation for growing Chevron's upstream business in Brazil. Our teams will now focus on the safe and timely execution of the project."

The development concept consists of horizontal production wells along with vertical water injection wells to maintain reservoir pressure. The wells will be individually tied back to a floating production storage and offloading (FPSO) vessel. Crude oil export will be by tanker, while natural gas will be transported through the local natural gas pipeline infrastructure.

Chevron, through its affiliate Chevron Brasil Limitada, is the operator of the Frade Field and holds a 51.74 percent working interest. Other partners in the project include Petroleo Brasileiro S.A. – Petrobras, 30 percent; and Frade Japao Petroleo Limitada, 18.26 percent.

Chevron is one of the world's leading energy companies. With more than 53,000 employees, Chevron subsidiaries conduct business in approximately 180 countries around the world, producing and transporting crude oil and natural gas, and refining, marketing, and distributing fuels and other energy products. Chevron is based in San Ramon, Calif. More information about Chevron is available at www.chevron.com.

Editor's Note:

In late 2005, Chevron entered into a three-year drilling contract with Transocean Inc. for the Sedco 706 to drill the Frade development wells.

In the past week the following contracts have been awarded:

  1. Engineering, procurement, construction and installation (EPCI) of a floating production, storage and offloading (FPSO) vessel to Single Buoy Moorings Inc. of Switzerland;
  2. Operations services of the FPSO to Single Buoy Moorings Frade Servicos Maritimos Ltda. of Brasil;
  3. Design and manufacture of subsea equipment to FMC Brazil and FMC Technologies Houston;
  4. Design and manufacture of umbilicals to Marine Production Systems do Brasil, Ltda, a subsidiary of Oceaneering International Inc. of Houston;
  5. Design and manufacture of flexible pipe to Wellstream International Limited of the United Kingdom;
  6. Installation of subsea facilities to Acergy Brasil, S.A. and Acergy U.S. Inc.

CAUTIONARY STATEMENT RELEVANT TO FORWARD-LOOKING INFORMATION FOR THE PURPOSE OF "SAFE HARBOR" PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995.

This press release of Chevron Corporation contains forward-looking statements relating to Chevron's operations in Brazil that are based on management's current expectations, estimates and projections about the petroleum, chemicals and other energy-related industries. Words such as "anticipates," "expects," "intends," "plans," "targets," "projects," "believes," "seeks," "estimates" and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and other factors, some of which are beyond our control and are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this release. Unless legally required, Chevron undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

U.S. Securities and Exchange Commission (SEC) rules permit oil and gas companies to disclose only proved reserves in their filings with the SEC. This press release contains estimates of crude oil and natural gas quantities contained in the Frade Field, which may not be limited to proved reserves, and that may not be permitted to be included in disclosures in documents filed with the SEC. U.S. investors should refer to disclosures in Chevron's Annual Report on Form 10-K for the year ended December 31, 2005.

Updated: June 2006